FOREIGN INVESTMENT
Investing Outside the U.S.
The expansion of the global marketplace is creating many new investment opportunities outside the U.S. Those investments made by U.S. taxpayers in the businesses or stock markets of other countries are generally referred to as “outbound transactions.”
Taxes are based on IRS rules plus tax treaties of individual countries
The tax laws governing cross-border transactions are complex and require familiarity with the tax rules and the tax treaties established with individual countries. Many taxpayers are unaware of the rules, which can lead to higher taxes and the assessment of penalties.
LTL provides expert counsel for both individuals and business owners who need to assess and manage the tax impact of their foreign investments and operations.
We advise U.S. businesses and individuals on:
- Tax-efficient methods for setting up operations or subsidiaries in a foreign country.
- The tax impact of foreign investments, corporations, partnerships, limited liability companies (LLC), controlled foreign corporations (CFCs) and passive foreign investment companies (PFIC).
LTL also:
- Works with foreign counsel to determine a tax-efficient structure for operating in the destination country.
- Determines the reporting requirements of a U.S. taxpayer as a result of a foreign investment or operation.
- Helps our clients make full use of tax treaties to manage tax risk.
Investing into the U.S.
When a foreign person invests in a local economy, it is called an “inbound investment.” A common inbound investment is a foreign direct investment (FDI)–when a company purchases another business or establishes new operations of an existing business in the U.S. These inbound, or inward, investments help foreign companies grow by opening borders for global expansion in the U.S.
LTL counsels clients on setting up and operating businesses in the U.S.
LTL counsels our clients on all phases of setting up and operating businesses in the U.S. We advise non-U.S. persons on the tax impact of investments in a U.S. asset or business, and we also advise those working with foreign investors about their tax-reporting obligations.
Planning for Tax Compliance
Tax compliance is the degree to which taxpayers comply–or fail to comply–with the tax rules of their countries by declaring income, filing a return and paying the taxes that are due. In many cases, taxpayers may be unaware of income from foreign sources that needs to be reported to the IRS or that they have U.S. tax obligations as well.
LTL takes a proactive approach to understanding our clients’ U.S. tax obligations. We advise individuals and businesses regarding tax compliance issues so that they can take preventive actions before they incur costly penalties.